The Bank of England has warned that weak global growth and trade barriers created by the government’s Brexit deal will hit the UK economy.
It came as two Bank policymakers called for an immediate interest rate cut to support growth.
The Bank voted 7-2 to keep interest rates on hold at 0.75%.
The Bank said the new EU withdrawal agreement struck by Prime Minister Boris Johnson had reduced the likelihood of a no-deal Brexit.
The Monetary Policy Committee (MPC) that sets interest rates said this would end some of the uncertainty facing businesses and households.
However, policymakers added that the transition to a new trade deal would introduce new customs checks and regulatory barriers.
The MPC said its assumption of a Canada-style “deep free-trade agreement” between the UK and EU would “raise administrative costs for firms” doing business with the continent.